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FCC Steps up Enforcement of Broadband Transparency Rules

Continuing its efforts to enforce the Open Internet transparency rules, the FCC’s Enforcement Bureau on Wednesday, Oct. 19, announced a settlement and consent decree with a mobile broadband ISP (T-Mobile) under which the company will pay $48 million in a combination of fines and remedies to affected customers. T-Mobile will take other remedial action that ensures its disclosures to its customers regarding the operation of its unlimited data plans are adequate. Putting aside any particularities of this item, the FCC’s order may be leveraged as guidance for ISPs attempting to comply with the transparency rule. In particular, it affirms the importance of using concrete terms in transparency notices that describe the impact that an ISP’s de-prioritization policy may have on customers, including the operation of specific thresholds or “data usage markers.”

The Bureau alleged that there was a failure to adequately inform customers of the impact of a “de-prioritization” policy that allegedly reduced the network performance of some of the company’s heaviest data users who subscribed to unlimited data plans. The Bureau concluded that the ISP failed to properly disclose certain elements of this policy. Specifically, the consent decree asserts that the company’s notices were insufficient because they: (1) failed to identify the data usage threshold that would trigger application of the de-prioritization policy; (2) failed to explain how the policy could affect a de-prioritized customer’s ability to use their service; and (3) failed to disclose the data speed reduction that a de-prioritized customer would experience when the policy was triggered.

In addition to serving as a reminder of the potential financial consequences that ISPs may face in this area, the consent decree provides a useful discussion surrounding the form and content of transparency disclosures that the FCC may find acceptable. In fact, the Bureau praised T-Mobile for expanding and refining its disclosures in June 2015 (during the pendency of this case) and found favor with the following components of the company’s enhanced notices:

The enhanced notices established a “data marker” which served to inform customers of the data usage threshold that would trigger the application of the de-prioritization policy;

The enhanced notices used definitive language notifying customers that their data usage would be de-prioritized upon reaching that threshold (in contrast to earlier, more open-ended language, that suggested some traffic might be affected); and

The enhanced notices specifically detailed and explained the effects on service performance once the de-prioritization policy was triggered for such customers.

The Bureau found that these enhanced notices resolved the problems on which the consent decree is based, noting that “[c]ombined, these modifications increase consumers’ knowledge about the operation and effect of the policy, allowing them to make more informed choices in selecting and using” their service.